travel tech insights

5 Myths About the Role of Online Travel Agencies

Ever since they rose to prominence, there has always been misinformation about the role and value of online travel agencies (OTAs). OTAs were initially viewed a short-cut to increased profit margins and growth without really adding value to the travel and tourism industry. However, with the rise in online bookings, social media, and mobile technology, OTAs have established themselves as a benchmark for how online travel companies can and should operate in today’s global travel marketplace.

Yet even as OTAs have solidified their standing in the travel industry, many myths still exist about how they function, the value they provide to customers, and their place as a key driver in the evolution of the modern travel industry. Some of these myths stem from simple misunderstandings about the role of OTAs in the e-commerce sector of the industry, while others are based on trends within the industry that drive popular thought - for example, how in recent years millennials have turned to brick-and-mortar travel agents because they desire a one-on-one, personal connection in making their travel plans.

Whatever the reason, it’s important today’s traveler - as well as those within the travel industry - understand the importance and value OTAs bring to the table. With that in mind, here are 5 myths about the role of OTAs in today’s travel industry and the truth behind them.

Perhaps in the early days of OTAs this may have been true - when researching and completing travel bookings online was still a new part of the tourism industry. However, today’s online travel agents are able to offer high levels of customer service through mobile apps, responsive websites, email campaigns, and even social media platforms. OTAs today have multiple channels of customer outreach to not only promote and offer new products and services, but solicit feedback from customers which can be used to alter products and services offered.

Myth #2: Traditional travel agents are a dying breed and OTAs will soon suffer the same fate.

Actually, traditional travel agents have seen a resurgence in the last few years thanks to millennials and younger generations of travelers. In fact, travel market research group Phocuswright recently reported the percentage of travelers booking online has leveled off in favor of using traditional travel agents - in addition, the American Society of Travel Agents (ASTA) reported more than 30 percent of millennials have used a travel agent in the last 12 months. OTAs have experienced similar levels of growth in the last few years thanks to advancements in mobile booking technology, and industry analysts believe OTAs will continue to experience robust growth in the coming years.

Advancements in geomapping, auto-fill search returns, and recommendations algorithms can actually allow customers to tailor their travel bookings to exacting specifications. In addition, OTAs that leverage direct communication channels such as mobile chat applications and social media platforms can engage with customers on a one-on-one basis. This level of customer relations management gives travelers the personalized booking experience they desire with increased speed and convenience.

Because OTAs are essentially available on a 24/7 basis - the internet never really closes - travelers have nearly unlimited access to their bookings. This makes it quick, easy, and simple for travelers to adjust bookings based on cancellations or errors - flight delays, misplaced reservations, overbookings, and more. With the increase in direct communication capabilities, OTAs are more able to engage with travelers via chat or messaging applications to help troubleshoot errors or disruptions in travel. This results in a greater peace of mind for the tourist and a positive value proposition for the OTA in their customer engagement.

Myth #5: OTAs are a passing trend that will fade away with time.

OTAs are here to stay. Global bookings via online travel agencies have grown by leaps and bounds in the last few years, and industry experts expect these increases to continue through the year 2020. In 2015, the largest share of OTA bookings was based in the United States, however, emerging markets in Europe, Asia, and South America are poised to drive huge growth for OTAs in these regions. The rise of these markets is set to further establish OTAs as a permanent force in today’s travel industry, as well as expand the products and services these online travel agents are able to offer customers.